Establishing a steady income in retirement remains one of the foremost goals of all investors. To accomplish that feat, investors should draw on a well-diversified portfolio that includes some dividend-paying stocks.
Fortunately, the market provides us with ample options, including these candidates that can provide a steady income in retirement.
Banking on future growth and a stable income
Canada’s big banks are among some of the best long-term options to consider for any portfolio. The reason for that stems back to their mature domestic segments that provide a stable revenue stream coupled with long-term international growth prospects.
Throw in a juicy dividend that has paid out without fail for well over a century and you have a prime candidate to generate a steady income in retirement.
And Bank of Montreal (TSX:BMO) is the bank that investors should be looking at right now. BMO offers investors nearly two centuries of juicy dividend payouts with fail. Today, the yield on that dividend works out to an appetizing 4.95%.
Turning to growth, BMO has focused its expansion efforts on the U.S. market. Earlier this year, the bank completed the acquisition of California-based Bank of the West. The deal brings hundreds of new branches and 1.8 million new customers into BMO’s growing U.S. segment.
That segment now has a reach into 32 state markets, and the deal has propelled BMO into position as one of the largest lenders in the U.S.
Steady growth, steady dividend
Utilities are some of the most defensive stocks for any portfolio, making them great options to establish a steady income in retirement. The reason for that comes down to the stable if not lucrative nature of their business. In short, utilities generate a stable revenue stream that is backed by long-term, regulated contracts.
That stability allows utilities to invest in growth and maintain a generous dividend.
Fortis (TSX:FTS) is one of the largest utilities in North America with operations across Canada, the U.S., and the Caribbean. The regulated nature of its business, which services over three million gas and electric customers, provides a stable revenue stream that topped $11 billion last year.
Apart from its reliable and stable business model, Fortis has provided investors with 49 consecutive years of annual dividend increases. That gives Fortis the second-longest streak in Canada, and it’s on track for a 50th increase later this year. When that happens, Fortis will become just the second Dividend King in Canada.
As of the time of writing, Fortis’s quarterly dividend works out to an appetizing 4% yield, making it a great option to establish or maintain a steady income in retirement.
Another stable business with a growing dividend
Utilities are great defensive investments, but there’s another segment to build a steady income in retirement to consider. That would be Canada’s telecoms.
Telus (TSX:T) provides the typical bevy of subscription-based services to customers across the country.
In recent years, the importance of a wireless and home internet connection has become one of necessity. This has elevated the already defensive appeal of a telecom stock like Telus even further.
Despite that defensive appeal, Telus stock has dipped over 10% in the trailing 12-month period.
Prospective investors should keep in mind that Telus is a long-term investment to establish a steady income in retirement. In other words, the price dip should be seen more as an opportunity to buy Telus at a discount.
That dip has swelled Telus’s already impressive dividend. As of the time of writing, the yield works out to 5.71%. This makes Telus one of the better-paying dividends on the market.
Additionally, Telus has provided investors with annual or better bumps to that dividend for well over a decade. The telecom also plans to continue that cadence.
A steady income in retirement is possible
Finding the right mix of investments to establish a steady income in retirement is possible. And while no investment is without risk, the three stocks noted above all boast significant defensive appeal as well as growth and income-earning capabilities.
In my opinion, one or all of the above should be core holdings in any long-term, well-diversified portfolio.
Buy them, hold them, and enjoy a steady income in retirement.
